Brooklyn Bridge Park Meeting of the Directors Held at 334 Furman … · 2020. 10. 10. · Stephen Levin* Rebecca Miller Stephen Merkel Susannah Pasquantonio Tucker Reed William Vinicombe

Brooklyn Bridge Park Corporation d/b/a Brooklyn Bridge Park

Meeting of the Directors Held at 334 Furman Street

Brooklyn, NY

October 10, 2018

MINUTES The following members of the Board of Directors were present:

Joanne Witty – Vice Chair Margaret Anadu Peter Aschkenasy Henry Gutman Stephen Levin*

Rebecca Miller Stephen Merkel Susannah Pasquantonio Tucker Reed William Vinicombe Matt Wing Sonam Velani *Not present at all times

Also, present was the staff of Brooklyn Bridge Park Corporation (“BBP”) and members of the public.

Vice Chair Witty called the meeting to order at approximately 11:02 a.m. Suma Mandel,

Secretary and General Counsel of BBP, served as secretary of the duly constituted meeting and confirmed that a quorum was present.

Prior to proceeding with the agenda items, Vice Chair Witty welcomed the Board, BBP Staff and

members of the public, noted the presence of State Senator Kavanaugh and thanked him for attending. She also noted the appointment of Director Andrea Phillips, who was unable to attend due to a prior conflict, to replace outgoing Director Hyman whose term had expired, and thanked Director Phillips in advance for her service.

1. Approval of Minutes Upon motion duly made and seconded, the minutes of the June 6, 2018 Board of Directors

meeting were unanimously1 approved.

1 Director Levin was not present for this vote.

2

2. Presentation of the Annual Report and Annual Audit Report, Approval of the Audited Fiscal Year 2018 Financial Statements and Investment Report, and President’s Report

Jelani Watkins, BBP’s Chief Financial Officer presented the Annual Report and Annual Audit Report and requested that the Board approve the Fiscal Year 2018 Financial Statements and Investment Report.

Director Merkel confirmed that the Audit and Finance Committee had reviewed and were comfortable with the financial statements, noting that the process was smooth and that the Audit and Finance Committee had ample opportunity to review the documents and discuss them with BBP Staff and the auditors. Director Merkel recommended the Board approve the item.

Upon motion duly made and seconded, the resolutions attached hereto as Schedule A were

unanimously2 adopted.

Mr. Landau then presented the President’s Report. He reviewed the past summer at the Park, including: (i) the opening of Pier 3, the last pier to be converted to parkland; (ii) the announcement of plans to build a permanent pool; (iii) programming, including Conservancy programming, the GlassBarge, Photoville and the Public Art Fund’s “Hot Dog Bus” exhibit; and (iv) a successful concession season.

With respect to the permanent pool, Mr. Landau stated that BBP plans to partner with Brooklyn

Bridge Park Conservancy for fundraising and to work with local elected officials to secure funds for the project. He also advised that BBP will engage in community planning sessions for the pool with the assistance of its consultant, TYTHEdesign, which has already completed stakeholder interviews, and that after BBP receives the consultant’s report, BBP will prepare and release an RFP for design.

Mr. Landau also advised the Board that BBP was in the process of reviewing responses received

at the end of September for the Historic Fireboat Concession at Fulton Ferry Landing and would likely return to the Board with a recommended concessionaire at the December Board meeting.

Mr. Landau then reported that construction on the Pier 6 Development Sites was on schedule with expected completion and occupation of Parcel B by the end of the calendar year and Parcel A by the end of the summer. He noted that the lottery for affordable housing began last month.

Mr. Landau advised the Board that because of the funds from the Pier 6 Development Sites, BBP

was able to commence preventative maritime maintenance work in the Park, and the dive work for Pier 3 and Pier 5 was now complete. He stated that BBP will likely seek approval from the Board for the construction portion of the maintenance work in mid-2019. Mr. Landau updated the Board on Squibb Park Bridge, explaining that this past summer, during inspection, BBP’s engineer of record Arup discovered a piece of wood with visual deterioration and recommended immediate closure of the bridge. BBP immediately closed the bridge and installed a temporary stabilization measure to ensure there was no further structural damage to the bridge. Mr. Landau stated that BBP’s wood experts examined the horizontal and vertical spans of the bridge and found that multiple pieces either had high moisture levels or had already decayed. Mr. Landau indicated that BBP is fully committed to having a bridge connecting Squibb Park to Brooklyn Bridge Park and will work

2 Director Levin was not present for this vote.

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with Arup to determine the appropriate solution in order to reopen the bridge as soon as possible. BBP will share that information with the Board, including anticipated cost and timeline.3 Mr. Landau explained that, with respect to the BQE project, prior to the suggestion at a public meeting a couple weeks ago, he was not aware of any discussion of placing temporary roadway through the Park. However, BBP would provide DOT with any information they need for their analysis and continue to update the Board during this process. Mr. Landau further stated that based on recent conversations, neither DOT nor BBP believes that there will be any impact on either the repair of Squibb Park Bridge or the pool project.

Mr. Landau announced that the construction of the Brooklyn Bridge Plaza is fully funded due to allocations from the Mayor, Borough President and City Council and that BBP is completing a community planning process with Pratt Institute and the Community Advisory Council. He stated that once that process is complete, BBP’s designer, MVVA, will advance the actual design, which BBP will share with the Board, the CAC and the community, with the goal of commencing construction sometime in 2019 or 2020, with Brooklyn Bridge Plaza opening the following year.

Mr. Landau updated the Board on the status of the Pier 2 Uplands construction, which

commenced after Labor Day and will include the completion of the sound attenuating berm, a large lawn and a water play feature. He stated that this construction will add 5 additional bus layover spaces in the parking lot, which should be completed and open to the public by Memorial Day; and that the rest of the project is expected to be complete in the summer of 2020.

In response to a question from Director Pasquantonio, Mr. Landau indicated that he believed that

the affordable housing lottery for Parcel B at the Pier 6 development was currently in process. Alternate Director Velani confirmed that she believed the lottery was scheduled through the end of November and that the information was available to the public on the New York City Department of Housing Preservation and Development (“HPD”) portal. In response to a question from Director Gutman, Mr. Landau confirmed that there are 140 total units in the building and that 80% of those (100 units) are affordable housing. Alternate Director Velani stated that in the past up to 90,000 people have applied for 100 units. Director Anadu added that although the lottery is scheduled up until November, it is typical for HPD to cut it off when it reaches 80,000 or 90,000 applicants. In response to an additional question from Director Pasquantonio, Mr. Landau explained that the wood used to construct the Squibb Park Bridge is Black Locust, which according to wood experts, is known for its durability and resistance to moisture levels. He stated that BBP may never know why this wood is a problem at this location and that BBP’s first priority is to reopen the bridge. In response to Director Wing, Mr. Landau confirmed that BBP would ensure that the bridge is reopened in a manner where this process would not need to be repeated a year from now.

3. Annual Approval of Policies Relating to the Public Authorities Accountability Act of 2005, as

Amended by the Public Authorities Act of 2009

Suma Mandel, BBP’s General Counsel presented the item recommending that the Board ratify nine of the policies in their current form and amend the salary policy to specify that the President’s salary be determined by the Chairperson, provided that BBP’s policies concerning non-salary compensation,

3 Director Levin enters the meeting.

4

reimbursement, time and attendance be revised to reflect that they are to be determined by the President rather than follow the policies of the New York Economic City Development Corporation (“EDC”), and upon the recommendation of the Governance Committee, to clarify that these determinations are reviewable by the Audit & Finance Committee.

In response to a question from Vice Chair Witty, Director Gutman confirmed that the Governance

Committee had reviewed the proposed ratifications and amendment and recommended approval of the policies.

In response to a question from Director Wing asking what prompted the amendment, Ms. Mandel

explained that when BBP began as a corporation, HR was initially administered through EDC and therefore followed EDC’s policies concerning non-salary compensation, reimbursement, time and attendance. She explained that BBP has since switched over to its own benefits administration and although BBP still follows many of EDC’s policies, it was in the process of reviewing the employee handbook and policies and needed the flexibility to depart from EDC’s policies.

Upon motion duly made and seconded, the resolutions attached hereto as Schedule B were

unanimously adopted.

4. Authorization to Enter into a Seventeenth Amendment of the Funding Agreement with the City of New York Lindsey Ross, BBP’s Director of Capital Projects & Restoration presented the item.

Upon motion duly made and seconded, the resolutions attached hereto as Schedule C were unanimously adopted.

5. Authorization to Enter into Agreements Relating to Capital Projects Lindsey Ross, BBP’s Director of Capital Projects and Restoration presented the item.

Upon motion duly made and seconded, the resolutions attached hereto as Schedule D were unanimously adopted.

6. Approval of Appointments to the Audit & Finance and Budget & Operations Committee

Vice Chair Witty requested the Board approve the appointment of Director Phillips to the Audit & Finance Committee and Rebecca Miller to the Park Budget & Operations Committee. The item was unanimously approved by the Board.

7. Public Comment State Senator Brian Kavanaugh acknowledged Director Levin, Director Pasquantonio and his

representative Director Miller, and made remarks regarding the Squibb Park Bridge, the pool at Squibb Park and the upcoming BQE project.

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8. Adjournment Vice Chair Witty noted that Executive Session is a standing agenda item and asked the Board

whether there was any Director who believed that an Executive Session was necessary. Hearing none and there being no further business, Vice Chair Witty requested a motion to adjourn

the meeting, and upon the motion being duly made and seconded, the meeting was adjourned at approximately 11:39 a.m.

Respectfully submitted, ___/s/ Suma Mandel________ Suma Mandel Secretary Dated: December 5, 2018

Attachment A October 10, 2018

APPROVAL OF THE AUDITED FISCAL YEAR 2018 (“FY 2018”) FINANCIAL STATEMENTS AND INVESTMENT REPORT AND AUTHORIZATION TO TAKE RELATED ACTIONS BE IT RESOLVED that the FY 2018 audited financial statements of Brooklyn Bridge Park Corporation (“BBP”) attached hereto as Exhibit A and as certified as accurate by the President and Chief Financial Officer of BBP as set forth in Exhibit B are hereby approved; and be it further RESOLVED, that the FY 2018 Investment Report attached hereto as Exhibit C is hereby approved; and be it further RESOLVED, that the President of BBP or their designee(s) be authorized to present the above-referenced audited financial statements, certification and investment report to the sole member of BBP; and be it further RESOLVED, that the President of BBP or their designee(s) be authorized to report the audited financial statements and investment report and post them on its website in accordance with the provisions of PAAA; and be it further RESOLVED, that the President of BBP and their designee(s) be and each hereby is authorized and empowered to take all actions as the President or their designee(s) may deem necessary or appropriate to effectuate these resolutions.

* * *

EXHIBIT A

AUDITED FINANCIAL STATEMENTS

[Attached]

BROOKLYN BRIDGE PARK CORPORATION (D/B/A BROOKLYN BRIDGE PARK)

(A COMPONENT UNIT OF THE CITY OF NEW YORK)

Financial Statements (Together with Independent Auditors’ Report)

Years Ended June 30, 2018 and 2017


(A COMPONENT UNIT OF THE CITY OF NEW YORK)

FINANCIAL STATEMENTS (Together with Independent Auditors’ Report)

YEARS ENDED JUNE 30, 2018 AND 2017

CONTENTS

Page

Independent Auditors' Report ........................................................................................................................................ 1-2

Management’s Discussion and Analysis ....................................................................................................................... 3-7

Basic Financial Statements: Statements of Net Position ............................................................................................................................................. 8

Statements of Revenues, Expenses, and Changes in Net Position ............................................................................. 9

Statements of Cash Flows ............................................................................................................................................ 10

Notes to Financial Statements ................................................................................................................................ 11-21

Marks Paneth LLP

685 Third Avenue

New York, NY 10017

P 212.503.8800

F 212.370.3759

markspaneth.com

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of

Brooklyn Bridge Park Corporation (d/b/a Brooklyn Bridge Park)

We have audited the accompanying financial statements of Brooklyn Bridge Park Corporation (d/b/a

Brooklyn Bridge Park) (“BBP”), a component unit of The City of New York, as of and for the years ended

June 30, 2018 and 2017, and the related notes to the financial statements, which collectively comprise

BBP’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in

accordance with accounting principles generally accepted in the United States of America; this includes

the design, implementation, and maintenance of internal control relevant to the preparation and fair

presentation of financial statements that are free from material misstatement, whether due to fraud or

error.

Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We

conducted our audits in accordance with auditing standards generally accepted in the United States of

America. Those standards require that we plan and perform the audits to obtain reasonable assurance

about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s

preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of

the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating

the appropriateness of accounting policies used and the reasonableness of significant accounting

estimates made by management, as well as evaluating the overall presentation of the financial

statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the

financial position of Brooklyn Bridge Park Corporation (d/b/a Brooklyn Bridge Park) as of June 30, 2018

and 2017, and the respective changes in financial position and cash flows thereof for the years then

ended in accordance with accounting principles generally accepted in the United States of America.

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Other Matters

Accounting principles generally accepted in the United States of America require that the management’s

discussion and analysis on pages 3 through 7 be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the Governmental

Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the

basic financial statements in an appropriate operational, economic, or historical context. We have applied

certain limited procedures to the required supplementary information in accordance with auditing

standards generally accepted in the United States of America, which consisted of inquiries of

management about the methods of preparing the information and comparing the information for

consistency with management’s responses to our inquiries, the basic financial statements, and other

knowledge we obtained during our audits of the basic financial statements. We do not express an opinion

or provide any assurance on the information because the limited procedures do not provide us with

sufficient evidence to express an opinion or provide any assurance.

New York, NY

September 21, 2018


(A COMPONENT UNIT OF THE CITY OF NEW YORK) MANAGEMENT’S DISCUSSION AND ANALYSIS

YEARS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The following is an overview of the financial activities of Brooklyn Bridge Park Corporation (d/b/a Brooklyn Bridge

Park), (“BBP”), a component unit of The City of New York (the “City”) for the years ended June 30, 2018 and 2017.

The financial statements consist of two parts: management’s discussion and analysis (this section) and the financial

statements. The basic financial statements, which include the statements of net position, the statements of revenues,

expenses and changes in net position, the statements of cash flows and the notes to the financial statements, are

prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”), as prescribed by the Governmental Accounting Standards Board (“GASB”). The financial statements are

prepared using the economic resources measurement focus and the accrual basis of accounting, in which revenues

are recognized in the period they are earned and expenses are recognized in the period they are incurred.

FINANCIAL HIGHLIGHTS AND OVERALL ANALYSIS – FINANCIAL STATEMENTS ORGANIZATION OVERVIEW

BBP is the entity responsible for the planning, construction, maintenance and operation of Brooklyn Bridge Park (the

“Park”), an 85-acre sustainable waterfront park stretching 1.3 miles along Brooklyn’s East River shoreline. BBP was

incorporated in June 2010 under the New York State Not-for-Profit Laws and began operating on July 29, 2010 when it

acquired control of, and responsibility for, the Park via a 99-year master ground lease from Brooklyn Bridge Park

Development Corporation (“BBPDC”), a subsidiary of the Empire State Development Corporation. BBP is governed by a

17-member board of directors appointed by the Mayor of New York City, 8 of whom are nominated by the Governor of

New York State and local elected officials.

BBP operates under a mandate to be financially self sustaining. This mandate was memorialized in the Memorandum of

Understanding signed by Governor George Pataki and Mayor Michael Bloomberg in 2002 that created BBP. While a

small fraction of the required operations and maintenance funds for the Park will be collected from concessions located

throughout the Park, the majority of the funds will come from a limited number of revenue-generating development sites

within the project’s footprint. The development program was determined after an in-depth analysis of the potential

development types and locations. The analysis focused on finding uses that would (1) generate sufficient revenue to

support park operations, (2) minimize the size of the required development footprint, and (3) be compatible with the

surrounding park and neighborhood uses. Development locations were chosen to (1) take advantage of the existing

urban context by concentrating development on the city side of the site, particularly around the park entrances (2)

maintain the protected view corridor from the Brooklyn Heights Promenade, and (3) create vital, active urban junctions at

each of the Park’s three main entrances.

FISCAL YEAR 2018 FINANCIAL HIGHLIGHTS: During the year ended June 30, 2018, BBP received $14,620,414 in capital funds from the City pursuant to its funding

between the City and the New York City Department of Parks and Recreation (“DPR”). During the year ended June 30,

2018, BBP spent $14,228,788 on eligible project costs. Since June 30, 2011, BBP processed the eighth through

sixteenth funding agreements. These agreements revised the total amounts from $132,111,000 to $285,084,000

respectively.

During the year ended June 30, 2017, BBP received $12,637,457 in capital funds from the City pursuant to its funding

agreement between the City and the DPR. During the year ended June 30, 2017, BBP spent $20,620,027 on eligible

project costs.




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FINANCIAL HIGHLIGHTS AND OVERALL ANALYSIS – FINANCIAL STATEMENTS (Continued) The following summarizes the activities of BBP for the years ended June 30:

2018 vs 2017 vs2018 2017 2016 2017 2016

Permits and fees 1,891,644$ 1,861,575$ 1,784,885$ 2% 4%

PILOT payments and ground lease rents 55,600,237 35,566,497 8,238,489 56% 332%

Total operating revenues 57,491,881 37,428,072 10,023,374 54% 273%

Personnel costs 5,037,011 4,402,930 4,397,090 14% 0%

Utilities, repairs and maintenance and security 5,729,564 4,453,946 2,674,095 29% 67%

Professional fees 2,540,798 1,816,367 1,059,980 40% 71%

Depreciation and amortization 16,562,256 7,165,165 6,683,627 131% 7%

General and administrative expenses 1,254,019 886,768 992,646 41% -11%

Other - (85,116) 22,018 100% -487%

Total operating expenses 31,123,648 18,640,060 15,829,456 67% 18%

Operating income (loss) 26,368,233 18,788,012 (5,806,082) 40% -424%

Capital and other contributions 14,228,788 20,624,577 12,928,312 -31% 60%

Other contributions from government sources - - 1,043,061 0% -100%

Interest and other income 106,516 107,745 27,063 -1% 298%

Total nonoperating revenues (expenses) 14,335,304 20,732,322 13,998,436 -31% 48%

Change in net position 40,703,537 39,520,334 8,192,354 3% 382%

Net position - beginning of year 286,573,326 247,052,992 238,860,638 16% 3%

Net position - end of year 327,276,863$ 286,573,326$ 247,052,992$ 14% 16%

Variance (%)

OPERATING REVENUES:

NONOPERATING REVENUES (EXPENSES):

OPERATING EXPENSES:

OPERATING REVENUES: FY2018 VS FY2017 The operating revenues for the year ended June 30, 2018 increased by $20,063,809 from $37,428,072 to $57,491,881,

primarily due to the one-time lump sum rent payment of $25,500,000 from the Pier 6 Development Site and Payment in

Lieu of Mortgage Recording Tax (PILOMRT) payments totaling $10,639,323 pursuant to the lease agreements with the

developers of the Pier 6 and Empire Stores development sites. The year-to-year variance is also attributable to

participation rent and sales transfer fees totaling $15,358,307 received in the prior year. FY2017 vs FY2016 The operating revenues for the year ended June 30, 2017 increased by $27,404,698 from $10,023,374 to

$37,428,072, primarily due to participation rent and sales transfer fees totaling $15,437,378 pursuant to the lease

agreement with the developers of the John Street development site and one-time lump sum rent payment totaling

$8,860,000 pursuant to the lease agreements with the developers of the Pier 1 development site. Also contributing to

the increase was a combination of additional higher rent payments, Payments in Lieu of Taxes (PILOT) and

Payments in Lieu of Mortgage Recording Taxes (PILOMRT) totaling $7,061,647. The year to year increases were

partially offset by lower Payments in Lieu of Sales Tax (PILOST).




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FINANCIAL HIGHLIGHTS AND OVERALL ANALYSIS – FINANCIAL STATEMENTS (Continued)

OPERATING EXPENSES: FY2018 vs. FY2017 BBP’s operating expenses increased from the year ended June 30, 2017 by $12,483,588 from $18,640,060 to

$31,123,648. The depreciation expense increased from $7,165,165 to $16,562,256. The increase in depreciation is

related to improvements on existing park assets and new assets placed into service in FY2018 which includes the

completion of the Pier 5 uplands, maintenance & operations building, boathouse and maritime maintenance work on

various piers. The increases in Personnel Costs, Security, and Repairs and Maintenance are attributed to park

growth and usage and the additional staff required to maintain the Park and the administrative functions.

FY2017 vs. FY2016 BBP’s operating expenses increased from the year ended June 30, 2016 by $2,810,604 from $15,829,456 to

$18,640,060. The depreciation expense increased from $6,683,627 to $7,165,165. The increase in depreciation is

related to new assets plFSaced into service in FY2017 which include park equipment and facility improvements. The

increase in repairs and maintenance is primarily driven by expenses in association with the Park’s ongoing capital

and maritime maintenance projects. The increase in Professional Fees is attributed to higher legal costs associated

with ongoing park litigation. The increases in Personnel Costs, Security, and Utilities are attributed to park growth

and usage and the additional staff required to maintain the Park and the administrative functions.

NONOPERATING REVENUES: FY2018 vs. FY2017 BBP’s nonoperating revenues decreased from the year ended June 30, 2017 by $6,397,018 from $20,732,322 to

$14,335,304. BBP recognizes capital funding as revenue when eligible projects costs are incurred. Therefore, the

decrease in capital contributions correlates to a corresponding decrease in capital projects in the current year (see

Note 5). BBP did not have any non-operating expenses in the current year.

FY2017 vs. FY2016 BBP’s nonoperating revenues increased from the year ended June 30, 2016 by $6,733,886 from $13,998,436 to

$20,732,322. BBP recognizes capital funding as revenue when eligible projects costs are incurred. Therefore, the

increase in capital contributions correlates to a corresponding increase in project costs in the current year (see Note

5).




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The following summarizes BBP’s assets, liabilities and net position as of June 30, 2018, 2017 and 2016:

2018 vs 2017 vs2018 2017 2016 2017 2016

ASSETS:Unrestricted cash and cash equivalents 15,687,307$ 25,657,660$ 16,453,373$ (9,970,353)$ 9,204,287$

Restricted cash and cash equivalents 45,578,366 29,815,636 29,337,877 15,762,730 477,759

Accounts receivable 6,655,254 15,394,254 555,542 (8,739,000) 14,838,712

Short-term investments - 1,249,791 12,560,565 (1,249,791) (11,310,774)

Long-term investments 50,136,718 23,562,387 17,148,225 26,574,331 6,414,162

Prepaid expenses 46,997 38,231 38,016 8,766 215

Capital assets, net 232,760,970 229,556,509 198,096,492 3,204,461 31,460,017

Total Assets 350,865,612 325,274,468 274,190,090 25,591,144 51,084,378

LIABILITIES:Accounts payable and accrued expenses 7,413,993 11,497,670 5,205,245 (4,083,677) 6,292,425

Security deposits 3,497,286 3,397,618 2,558,297 99,668 839,321

Unearned revenue 12,677,470 23,805,854 19,288,440 (11,128,384) 4,517,414

OPEB obligation - - 85,116 - (85,116)

Total Liabilities 23,588,749 38,701,142 27,137,098 (15,112,393) 11,564,044

NET POSITION:Invested in capital assets 232,760,970 229,556,509 198,096,492 3,204,461 31,460,017

Restricted for capital projects 26,568,363 8,389,696 7,596,286 18,178,667 793,410

Unrestricted 67,947,530 48,627,121 41,360,214 19,320,409 7,266,907

Total Net Position 327,276,863$ 286,573,326$ 247,052,992$ 40,703,537$ 39,520,334$

Variance ($)

FY2018 vs. FY2017 At June 30, 2018 BBP maintained total assets of $350,865,612 which was $25,591,144 higher than total assets of

$325,274,468 as of June 30, 2017.

BBP’s current assets as of fiscal year ended June 30, 2017 were $72,155,572 and such amounts decreased by

$4,187,648 to $67,967,924. Bank deposits consisting of unrestricted and restricted cash and cash equivalents

increased by $5,792,377 to $61,265,673 as compared to bank deposits of $55,473,296 held at June 30, 2017. BBP

receives operating cash from permits, concessions, and leases. Funding from the DPR was used for capital assets

while the operating funding is used for personnel services and daily maintenance and operations of the Park. The

increase in restricted and unrestricted cash is net of these costs used to build and maintain the Park.

BBP’s noncurrent assets as of fiscal year ended June 30, 2017 were $253,118,896 and such amounts increased by

$29,778,792 to $282,897,688 (representing 81% of total assets) as of June 30, 2018. Such amounts consist of

capital assets and include site improvements of $172,284,593 for Pier 2, Pier 3/4 uplands, Pier 4 beach, Pier 5, Pier

6, and the Main and John Street sections of the park. Other amounts for Building, improvements, and carousel of

$43,849,571 includes the Maintenance and Operations facility, Boathouse, Pier 6 Warming Hut, Squibb Park and

Bridge, Jane’s Carousel and the educational facility at 99 Plymouth Street. A remaining amount of $59,236,691 was

for construction in progress, costs that are primarily incurred in developing the park for projects such as Pier 3, Pier 2

uplands and pile repair.




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At June 30, 2018, BBP maintained long term investments valued at $50,136,718 in accordance with BBP’s investment

policy. (See Note 3)

The decrease in liabilities of $15,112,393 from June 30, 2017 to June 30, 2018 is primarily due to decreases in

accounts payable and uneared revenue due to recognizing revenue for the capital funding spent on BBP

construction projects.

Net position as of June 30, 2018 was $327,276,863 of which $232,760,970 was invested in capital assets and

$26,568,363 was restricted. The overall increase of 14% or $40,703,537 over net position at June 30, 2017

represents ongoing construction and improvements throughout the park.

FY2017 vs. FY2016 At June 30, 2017, BBP maintained total assets of $325,274,468 which was $51,084,378 higher than total assets of

$274,190,090 as of June 30, 2016.

BBP’s current assets as of fiscal year ended June 30, 2016 were $58,945,373 and such amounts increased by

$13,210,199 to $72,155,572 as of June 30, 2017. Bank deposits consisting of unrestricted and restricted cash and

cash equivalents increased by $9,682,046 to $55,473,296 as compared to bank deposits of $45,791,250 held at

June 30, 2016. BBP receives operating cash from permits, concessions, and leases. Funding from the DPR was

used for capital assets while the operating funding is used for personnel services and daily maintenance and

operations of the Park. The increase in restricted and unrestricted cash is net of these costs used to build and

maintain the Park. Additionally, BBP had a participation rent receivable of $13,658,307 pursuant to the lease

agreement with the developers of the John Street development site.

BBP’s noncurrent assets as of fiscal year ended June 30, 2016 were $215,244,717 and such amounts increased by

$37,874,179 to $253,118,896 (representing 78% of total assets) as of June 30, 2017. Such amounts consist of

capital assets and include site improvements of $113,276,437 for Pier 2, Pier 3/4 uplands, Pier 4 beach, Pier 5, Pier

6, and the Main and John Street sections of the park. Other amounts for Building, improvements, and carousel of

$32,133,842 include Squibb Park and Bridge, Jane’s Carousel, and the educational facility at 99 Plymouth Street. A

remaining substantial amount of $110,400,658 was for construction in progress, costs that are primarily incurred in

developing the park for pile repair, Pier 3, and the Pier 5 Uplands.

At June 30, 2017, BBP maintained short term and long term investments valued at $1,249,791 and $23,562,387,

respectively in accordance with BBP’s investment policy. (See Note 3)

The increase in liabilities of $11,564,044 from June 30, 2016 to June 30, 2017 is primarily due to increases in

accounts payable and unearned revenue. BBP recorded $12,499,984 in unearned revenue to defer the initial lease

payment received from the Pier 6 developer as it is contingent upon the outcome of the ongoing litigation. BBP also

recognizes revenue for the capital funding spent on construction projects.

Net position as of June 30, 2017 was $286,573,326 of which $229,556,509 was invested in capital assets and

$8,389,696 was restricted. The overall increase of 16% or $39,520,334 over net position at June 30, 2016

represents ongoing construction and improvements throughout the park.

This financial report is designed to provide a general overview of BBP’s finances. Questions concerning any of the

information in this report or requests for additional financial information should be directed to Brooklyn Bridge Park

Corporation, 334 Furman Street, Brooklyn, NY 11201.

**END**

BROOKLYN BRIDGE PARK CORPORATION(A COMPONENT UNIT OF THE CITY OF NEW YORK)

STATEMENTS OF NET POSITIONAS OF JUNE 30, 2018 AND 2017

2018 2017ASSETS

Current assets:Unrestricted cash and cash equivalents (Notes 2E and 8) 15,687,307$ 25,657,660$

Restricted cash and cash equivalents (Notes 2F and 8) 45,578,366 29,815,636

Accounts receivable, net (Note 2D) 6,655,254 15,394,254

Short-term investments (Notes 2G and 3) - 1,249,791

Prepaid expenses 46,997 38,231

Total current assets 67,967,924 72,155,572

Noncurrent assets:Long-term investments (Notes 2G and 3) 50,136,718 23,562,387

Capital assets, net of accumulated depreciation (Notes 2H and 4) 232,760,970 229,556,509

Total noncurrent assets 282,897,688 253,118,896

TOTAL ASSETS 350,865,612$ 325,274,468$

LIABILITIES

Current liabilities:Accounts payable and accrued expenses (Note 4) 7,413,993$ 11,497,670$

Security deposits 708,140 708,140

Unearned revenue (Notes 2C, 2D and 6) 12,677,470 23,805,854

Total current liabilities 20,799,603 36,011,664

Noncurrent liabilities:Security deposits 2,789,146 2,689,478

Total noncurrent liabilities 2,789,146 2,689,478

TOTAL LIABILITIES 23,588,749 38,701,142

COMMITMENTS AND CONTINGENCIES (Note 9)

NET POSITION (Note 2I)Invested in capital assets 232,760,970 229,556,509

Restricted for capital projects 26,568,363 8,389,696

Unrestricted 67,947,530 48,627,121

TOTAL NET POSITION 327,276,863 286,573,326

TOTAL LIABILITIES AND NET POSITION 350,865,612$ 325,274,468$

The accompanying notes are an integral part of these financial statements.- 8 -

BROOKLYN BRIDGE PARK CORPORATION (A COMPONENT UNIT OF THE CITY OF NEW YORK)

STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEARS ENDED JUNE 30, 2018 AND 2017

2018 2017OPERATING REVENUES:

Permits and other fees 1,891,644$ 1,861,575$

Payments in lieu of all taxes and ground lease rent (Notes 2D and 6) 55,600,237 35,566,497

Total operating revenues (Note 2B) 57,491,881 37,428,072

OPERATING EXPENSES:Personnel costs (Note 7) 5,037,011 4,402,930

Utilities 367,779 427,880

Professional fees 2,540,798 1,816,367

Repairs and maintenance 3,801,988 2,890,905

Security (Note 9C) 1,559,797 1,135,161

Depreciation and amortization 16,562,256 7,165,165

Other postemployment benefits obligation expense - (85,116)

Other general, administrative and project expenses 1,254,019 886,768

Total operating expenses (Note 2B) 31,123,648 18,640,060

Operating income 26,368,233 18,788,012

NONOPERATING REVENUES:Capital and other contributions (Note 5A) 14,228,788 20,624,577

Investment income 87,309 94,994

Other interest income 19,207 12,751

Total nonoperating revenues 14,335,304 20,732,322

CHANGE IN NET POSITION 40,703,537 39,520,334

Net position, beginning of year 286,573,326 247,052,992

NET POSITION, END OF YEAR 327,276,863$ 286,573,326$


BROOKLYN BRIDGE PARK CORPORATION (A COMPONENT UNIT OF THE CITY OF NEW YORK)

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2018 AND 2017

2018 2017CASH FLOWS FROM OPERATING ACTIVITIES:

Cash receipts from:

Customer payments 16,668,243$ 1,428,368$

Tenant payments 38,112,628 33,660,976

Total cash receipts from operating activities 54,780,871 35,089,344

Cash payments for:

Personnel costs (5,045,600) (4,389,082)

Services and supplies (9,820,698) (8,545,638)

Total cash payments for operating activities (14,866,298) (12,934,720)

Net Cash Provided by Operating Activities 39,914,573 22,154,624

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:Payments from lessees - security deposits 99,668 839,321

Net Cash Provided by Noncapital Financing Activities 99,668 839,321

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:Capital and other contributions received 14,550,414 12,642,007

Capital asset expenditures (23,554,254) (30,958,263)

Net Cash Used in Capital and Related Financing Activities (9,003,840) (18,316,256)

CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of investments (32,092,790) (23,464,121)

Securities matured 6,500,000 28,003,000

Interest received 374,766 465,478

Net Cash (Used in) Provided by Investing Activities (25,218,024) 5,004,357

NET INCREASE IN CASH AND CASH EQUIVALENTS 5,792,377 9,682,046

Cash and cash equivalents - beginning of year 55,473,296 45,791,250

CASH AND CASH EQUIVALENTS—END OF YEAR 61,265,673$ 55,473,296$

RECONCILIATION OF OPERATING INCOME TO NET CASH FROM OPERATING ACTIVITIES:Operating income 26,368,233$ 18,788,012$

Adjustments to reconcile operating income to net cash provided by

operating activities:

Depreciation and amortization 16,562,256 7,165,165

Changes in operating assets and liabilities:

Accounts receivable 8,739,000 (14,838,712)

Prepaid expenses (8,766) (215)

Acquisition ofcapital assets

Accounts payable and accrued expenses (296,140) (1,374,494)

Unearned revenue (11,450,010) 12,499,984

Other postemployment benefits obligation - (85,116)

Net Cash Provided by Operating Activities 39,914,573$ 22,154,624$

RECONCILIATION TO CASH AND CASH EQUIVALENTS, END OF YEAR: Unrestricted cash and cash equivalents 15,687,307$ 25,657,660$

Restricted cash and cash equivalents 45,578,366 29,815,636

CASH AND CASH EQUIVALENTS—END OF YEAR 61,265,673$ 55,473,296$

Supplemental Disclosure of Cash Flow Information:Noncash capital and related financing transactions:

Accrued capital asset expenditures 6,332,533$ 10,120,070$



(A COMPONENT UNIT OF THE CITY OF NEW YORK) NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2018 AND 2017

- 11 -

NOTE 1 – ORGANIZATION AND NATURE OF ACTIVITIES

Brooklyn Bridge Park Corporation (d/b/a Brooklyn Bridge Park) (“BBP”) was incorporated in June 2010 pursuant

to the Not-for-Profit Corporation Law of the State of New York (the “State”) and is a public charity and exempt

from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. BBP was formed for the

purposes of lessening the burdens of government by furthering developing and enhancing the economic vitality

of the Brooklyn waterfront through the development, operation and maintenance of a renovated waterfront area,

including a public park, which serves the people of the New York City region. BBP is responsible for the

planning, construction, maintenance and operation of Brooklyn Bridge Park (the “Project”), an 85-acre

sustainable waterfront park stretching 1.3 miles along Brooklyn’s East River shoreline. In advancing such

purposes, BBP is performing an essential government function in partnership with The City of New York (the

“City”). BBP is governed by a 17-member board of directors appointed by the Mayor of New York City, 8 of

whom are nominated by the Governor of New York State and local elected officials.

Portions of the Project area are leased by the City to Brooklyn Bridge Park Development Corporation

(“BBPDC”), a subsidiary of the New York State Urban Development Corporation, pursuant to the Prime Ground

Lease Agreement. On July 29, 2010, BBPDC and BBP entered into a Master Ground Lease Agreement (the

“Ground Lease”) where BBPDC leased the Project area, including office space at 334 Furman Street, to BBP in

order to advance the Project development plan for a one-time rental payment of $1. Also provided in the Ground

Lease is the assignment of the operating revenues from the Project to BBP to satisfy BBP’s obligations to

maintain and operate the Project. The Ground Lease shall expire on July 28, 2109.

Pursuant to the Assignment Agreements between BBPDC and BBP, BBPDC assigned to BBP its entire right,

title and interest in future capital funding from the Port Authority of New York and New Jersey (“PANYNJ”) under

the Port Authority Funding Agreement between BBPDC and PANYNJ and future funding from the City under the

Park Funding Agreement between BBPDC and the City. For financial reporting purposes, BBP is included as a component unit in the City’s comprehensive annual

financial report pursuant to Governmental Accounting Standards Board (“GASB”) Statement No. 14, The Financial Reporting Entity, as amended.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Accounting

BBP’s financial statements are prepared using the economic resources measurement focus and the accrual

basis of accounting. Under this basis, revenues are recognized in the period they are earned and expenses

are recognized in the period they are incurred.

In its accounting and financial reporting, BBP follows accounting principles generally accepted in the United

States of America (“U.S. GAAP”) as promulgated by the GASB.

B. Revenue and Expense Classification

BBP distinguishes operating revenues and expenses from nonoperating items in the preparation of its

financial statements. Operating revenues and expenses generally result from BBP’s ongoing operations.

The principal operating revenues include permits, concessions, rental income, payments in lieu of taxes

(“PILOT”), payments in lieu of sales taxes (“PILOST”), payments in lieu of mortgage recording taxes

(“PILOMRT”) and other fees. Major operating expenses include park operating costs, personnel costs,

professional fees and utilities.



JUNE 30, 2018 AND 2017

- 12 -

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Grants and Contributions

BBP receives capital funding for certain eligible project costs pursuant to the funding agreements with the

City, PANYNJ and other funding sources. BBP recognizes capital funding as revenue as eligible project

costs are incurred. Differences between the project costs incurred on specific projects and the related

receipts are reflected as grants and contributions receivable or as unearned revenue in the accompanying

statements of net position.

BBP also records contributions of cash and other assets from private donors when an unconditional

promise to give is received from a donor. Contributions are recorded at the fair value of the assets received

and are classified as unrestricted or restricted net position in the accompanying statements of net position

depending on any donor restriction.

D. Revenues from Ground Lease Rents and Payments in Lieu of Taxes

Rent is recognized as earned in accordance with the contractual terms of the lease to which it relates.

PILOT and upfront lease payments received in advance of the period to which they apply are deferred and

recognized as revenue during future periods. Initial lease payments which are nonrefundable and PILOST

and PILOMRT payments are recognized as revenue when received.

BBP determines whether an allowance for uncollectible receivables should be provided for leases

receivable, PILOT, PILOST, PILOMRT and other receivables. Such estimate is based on management’s

assessment of the aged basis of its receivables, current economic conditions, creditworthiness of its donors,

historical experience, and collections subsequent to year end. As of June 30, 2018 and 2017, BBP

determined an allowance of $0 and $2,654, respectively, was necessary for PILOT receivable.

E. Cash Equivalents

For the purposes of the statements of cash flows, cash equivalents include cash in banks and on hand,

certificates of deposit and highly liquid debt instruments with maturities of three months or less when

acquired.

F. Restricted Assets

Restricted assets consist of cash and cash equivalents and investments held and to be used for eligible

project costs pursuant to funding agreements with the City, PANYNJ and other funding sources.

Accordingly, such amounts are not available for general corporate purposes.

G. Investments and Fair Value Measurements

Investments are reported at fair value based on quoted market value. Securities transactions are recorded

on a trade-date basis. Realized gains and losses on sales of investments are determined on a specific

identification basis and are included in investment income in the accompanying statements of revenue,

expenses and changes in net position. Interest income is recognized when earned.

Fair value measurements are based on the price that would be received to sell an asset or paid to transfer a

liability in an orderly transaction between market participants at the measurement date. In order to increase

consistency and comparability in fair value measurements, a fair value hierarchy prioritizes observable and

unobservable inputs used to measure fair value into three levels, as described in Note 3.



JUNE 30, 2018 AND 2017

- 13 -

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

H. Capital Assets

Costs incurred by BBP in developing the project are capitalized as project assets and are recorded at cost.

The costs of normal maintenance of the project that do not add value to the project or extend its useful life

are not capitalized. Upon completion, site improvement costs are reclassified from construction-in-progress

and amortized over the estimated useful lives.

Other property and equipment purchased for use in operations by BBP in excess of $10,000 is capitalized

and depreciated using the straight-line method over the estimated useful life assigned.

The estimated useful lives of depreciable capital assets are as follows:

Site improvements 10 to 30 years

Carousel 50 years

Building and improvements 15 to 25 years

Furniture and fixtures 3 to 5 years

Vehicles and equipment 3 to 5 years

I. Net Position

BBP’s net position is classified in the following categories: invested in capital assets, consisting of project

assets, net of accumulated depreciation and amortization; restricted for capital projects, consisting of net

position restricted for specific purposes by law or parties external to BBP; and unrestricted net position,

consisting of net position that is not classified as invested in capital assets or restricted. When both

restricted and unrestricted resources are available for use for a specific purpose, it is BBP’s policy to use

restricted resources first then unrestricted resources as they are needed.

Restricted net position represents restricted assets reduced by the liabilities related to those assets. A

liability is related to a restricted asset when the asset results from incurring that liability or if the liability will

be liquidated with the restricted asset. If the liabilities relating to the restricted assets are greater than those

assets, then no balance is reported as restricted net position. Such negative amount would be reported as a

reduction to unrestricted net position. J. Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make

certain estimates and assumptions that affect amounts reported and disclosed in the financial statements

and related notes. Estimates include reserves for doubtful accounts receivable, depreciation, and other

postemployment benefits. Actual results could differ from those estimates.

K. Recent Accounting Pronouncements As a component unit of the City, BBP implements new GASB standards in the same fiscal year as they are

implemented by the City. The following are discussions of the standards requiring implementation in the

current year and standards which may impact BBP in the future years.



JUNE 30, 2018 AND 2017

- 14 -


In November 2016, GASB issued Statement No. 83, Certain Asset Retirement Obligations, (“GASB 83”). GASB 83 addresses accounting and financial reporting for certain asset retirement obligations.

This statement establishes criteria for determining the timing and pattern of recognition of a liability

and corresponding deferred outflow of resources for asset retirement obligations. The requirements

of GASB 83 are effective for fiscal years beginning after June 15, 2018, but was adopted in the

current fiscal year. The adoption of GASB 83 did not have an impact on BBP’s financial statements

as it has no such obligations.

In January 2017, GASB issued Statement No. 84, Fiduciary Activities, (“GASB 84”). The objective of GASB 84 is to improve guidance regarding the identification of fiduciary activities for accounting

and financial reporting purposes and how those activities should be reported. The requirements of

GASB 84 are effective for fiscal years beginning after December 15, 2018. BBP has not completed

the process of evaluating GASB 84, but does not expect it to have an impact on BBP’s financial

statements, as it does not enter in fiduciary activities.

In March 2017, GASB issued Statement No. 85, Omnibus 2017, (“GASB 85”). The objective of GASB 85 is to address practice issues that have been identified during implementation and

application of certain GASB statements. The requirements of GASB 85 are effective for fiscal years

beginning after June 15, 2017. The adoption of GASB 85 did not have an impact on BBP’s financial

statements.

In May 2017, GASB issued Statement No. 86, Certain Debt Extinguishment Issues, (“GASB 86”). The primary objective of GASB 86 is to improve consistency in accounting and financial reporting

for in-substance defeasance of debt by providing guidance for transactions in which cash and other

monetary assets are acquired with only existing resources – resources other than the proceeds of

refunding debt. This statement also improves accounting and financial reporting for prepaid

insurance on debt that is extinguished. The requirements of GASB 86 are effective for fiscal years

beginning after June 15, 2017. The adoption of GASB 86 did not have an impact on BBP’s financial

statements.

In June 2017, GASB issued Statement No. 87, Leases, (“GASB 87”). The objective of GASB 87 is to improve accounting and financial reporting for leases by governments. This statement increases

the usefulness of governments’ financial statements by requiring recognition of certain lease assets

and liabilities for leases that previously were classified as operating leases and recognized as

inflows of resources or outflows of resources based on the payment provisions of the contract. It

establishes a single model for lease accounting based on the foundational principle that leases are

financings of the right to use an underlying asset. Under this statement, a lessee is required to

recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to

recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance

and consistency of information about governments’ leasing activities. The requirements of GASB 87

are effective for fiscal years beginning after December 15, 2019. BBP has not completed the

process of evaluating GASB 87.

In March 2018, GASB issued Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements, (“GASB 88”). The objective of GASB 88 is to improve

consistency in the information that is disclosed in notes to government financial statements related

to debt by defining debt for the purpose of note disclosure and establishes additional note

disclosure requirements related to debt obligations of governments, including direct borrowing and

direct placements. The requirements of GASB 88 are effective for fiscal years beginning after June

15, 2018. BBP has not completed the process of evaluating GASB 88, but does not expect it to

have an impact on BBP’s financial statements.



JUNE 30, 2018 AND 2017

- 15 -


In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, (“GASB 89”). The objectives of GASB 89 are to enhance the relevance and comparability of information about capital assets and cost of borrowing for a reporting period

and to simplify accounting for certain interest costs by requiring interest costs incurred before the

end of a construction period to be recognized as an expense/expenditure in governmental fund and

government-wide financial statements. The requirements of GASB 89 are effective for fiscal years

beginning after December 15, 2019. BBP has not completed the process of evaluating GASB 89,

but does not expect it to have an impact on BBP’s financial statements.

NOTE 3 – INVESTMENTS AND FAIR VALUE MEASUREMENTS

BBP’s investments consisted of the following at June 30:

2018 2017

Certificates of Deposit $ 747,812 $ 2,748,678

U.S. Government bonds 49,388,906 22,063,500

$ 50,136,718 $ 24,812,178

BBP’s investment policy permits BBP to invest funds of BBP as summarized and restricted below:

Obligations of the U.S. Treasury and other Federal Agency obligations. Commercial paper rated A-1 by Standard & Poor’s Corporation or P-1 by Moody’s Investors Service,

Inc. or Fitch.

Bankers’ acceptances and time deposits of banks with worldwide assets in excess of $50 million. Certificates of deposit with New York banks. Such certificates of deposit must be FDIC-insured, except

when otherwise collateralized.

Other investments approved by the Comptroller of the City for the investment of City funds.

In addition to the above investments, BBP may deposit funds in the following, with respect to funds needed for

operational expenses and funds awaiting investment or disbursement:

Money market mutual funds that restrict their investments to short-term, highly rated money market instruments.

Other interest-bearing accounts if permitted by applicable laws, rules and regulations, with New York City financial institutions designated by the New York City Banking Commission.

BBP categorizes its fair value measurements within the fair value hierarchy established by generally accepted

accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets.

Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other

observable inputs; and Level 3 inputs are significant unobservable inputs.

BBP has the following recurring fair value measurements as of June 30, 2018 and 2017:

Certificates of Deposit are carried at cost which approximate fair value (Level 1 inputs). U.S. Government bonds of $49,388,906 and $22,063,500 are valued using a matrix pricing model (Level

2 inputs).



JUNE 30, 2018 AND 2017

- 16 -

NOTE 3 – INVESTMENTS AND FAIR VALUE MEASUREMENTS (Continued) Custodial Credit Risk

Custodial credit risk is the risk that, in the event of the failure of the custodian, BBP may not be able to recover

the value of its investments or collateral securities that are in the possession of an outside party. All investments

are registered and are held by BBP’s agent in BBP’s name.

Credit Risk

All investments held by BBP at June 30, 2018 and 2017 are obligations of, or guaranteed by, the United States

of America and certificates of Deposits with New York Banks which are Federal Deposit Insurance Corporation

insured.

Interest Rate Risk

BBP’s short-term maturities are subject to minimal risk of fair value declines due to changes in market interest

rates. Investments with longer terms are expected to be held until maturity thereby limiting the exposure from

rising interest rates.

Concentration of Credit Risk

Concentration of credit risk is the risk of loss attributed to the magnitude of BBP’s investments in a single issuer

(5% or more). BBP’s investment policy places no limits on the amount BBP may invest in any one issuer of

eligible investments as defined in the Indenture. As of June 30, 2018 and 2017, 98% and 89%, respectively, of

BBP’s investments are in eligible government obligations and 2% and 11%, respectively, are Certificates of

Deposits with New York Banks.

NOTE 4 – CAPITAL ASSETS

The changes in capital assets for the year ended June 30, 2018 were as follows:

Balance at June 30, 2017 Additions Deletions

Balance at June 30, 2018

Site improvements $ 113,276,347 $ 59,008,156 $ - $ 172,284,593

Building, improvements and carousel 32,133,842 11,715,729 - 43,849,571

Furniture and fixtures 383,085 73,765 - 456,850

Vehicles and equipment 1,177,479 133,034 - 1,310,513

Total project assets 146,970,843 70,930,684 - 217,901,527

Less: accumulated depreciation Site improvements (25,236,498) (15,838,398) - (41,074,896)

Building improvements and carousel (1,536,091) (449,202) - (2,012,293)

Furniture and fixtures (205,316) (92,321) - (297,637)

Vehicles and equipment (810,087) (182,335) - (992,422)

Total accumulated depreciation (27,814,992) (16,562,256) - (44,377,248)

Construction in progress 110,400,658 23,425,698 (74,589,665) 59,236,691

Net project assets $ 229,556,509 $ 77,794,126 $ (74,589,665) $ 232,760,970



JUNE 30, 2018 AND 2017

- 17 -

NOTE 4 – CAPITAL ASSETS (Continued)

The changes in capital assets for the year June 30, 2017 were as follows:

Balance at June 30, 2016 Additions Deletions

Balance at June 30, 2017

Site improvements $ 113,224,978 $ 51,459 $ - $ 113,276,437

Building, improvements and carousel 29,045,094 3,088,748 - 32,133,842

Furniture and fixtures 188,364 194,721 - 383,085

Vehicles and equipment 980,900 196,579 - 1,177,479

Total project assets 143,439,336 3,531,507 - 146,970,843

Less: accumulated depreciation Site improvements (18,686,076) (6,550,422) - (25,236,498)

Building improvements and carousel (1,277,750) (285,341) - (1,563,091)

Furniture and fixtures (132,160) (73,156) - (205,316)

Vehicles and equipment (553,841) (256,246) - (810,087)

Total accumulated depreciation (20,649,827) (7,165,165) - (27,814,992)

Construction in progress 75,306,983 35,600,412 (506,737) 110,400,658

Net project assets $ 198,096,492 $ 31,966,754 $ (506,737) $ 229,556,509

BBP has entered into planning, design, construction and other project-related contracts for site improvements,

most of which are structured on a work order basis. BBP is responsible for accrued expenses per authorized

work order, not for the payment of contract balances. Capital expenditures totaling to $6,332,533 and

$10,120,070 were accrued as of June 30, 2018 and 2017, respectively, which will be paid upon receipt and

review of the contractor invoices.

NOTE 5 – GRANTS AND CONTRIBUTIONS A. Capital Contributions from Government Sources

During the years ended June 30, 2018 and 2017, BBP received capital funding for the project totaling

$14,620,414 and $12,637,457, respectively. During the years ended June 30, 2018 and 2017, BBP spent

$14,228,788 and $20,620,027, respectively, on eligible project costs. BBP recognized the amount spent for

eligible project costs as capital contributions in the accompanying statements of revenues, expenses and

changes in net position while the unspent funds are included in unearned revenue in the accompanying

statements of net position.

Included in capital contributions from government sources in the accompanying statements of revenue,

expenses and changes in net position are revenues derived from capital contracts with the City, which

amounted to $14,228,788 and $20,620,027 for the years ended June 30, 2018 and 2017, respectively.

Such amounts represented approximately 20% and 35%, respectively, of total revenues.

B. Non-Cash Capital Contributions

During the year ended June 30, 2012, BBP also received a donation of a restored 1920’s carousel (“Jane’s

Carousel”) along with a structure in which Jane’s Carousel is housed. BBP recorded such donated assets

at their estimated fair values of $4,250,000 and $9,200,000, respectively. Such fair values were estimated

based upon independent appraisals.



JUNE 30, 2018 AND 2017

- 18 -

NOTE 5 – GRANTS AND CONTRIBUTIONS (Continued)

Pursuant to the Donation Agreement (the “Agreement”) with the donor of Jane’s Carousel, BBP has

agreed that for a period of thirty years, commencing as of the date of the Agreement of May 21, 2010, BBP

shall not permanently remove Jane’s Carousel from the Park, provided, however, that Jane’s Carousel

may be temporarily removed for repair, refurbishment, protection from flood or other dangerous natural

occurrence, to accommodate necessary excavation work, and for other similar purposes and that Jane’s

Carousel shall be promptly reinstalled in the Park after the purpose for its removal is concluded.

In addition, the donor has agreed to operate and maintain Jane’s Carousel and to fund all costs and

expenses of such operation and maintenance for a period of ten years from the date of commencement of

operation of Jane’s Carousel.

NOTE 6 – FUTURE MINIMUM GROUND LEASE REVENUES BBP is entitled to future ground lease rents and PILOT payments from the development at 360 Furman Street

pursuant to a ground lease entered into by BBPDC and a tenant in February 2008. The ground lease is for a 99-

year term expiring in 2107. The ground lease provides for base annual rental payments of $1,250,000 for the

first three years and increasing 3% annually thereafter.

In June 2012, BBP entered into agreements for the development of a hotel and residential development on Pier

1. BBP has entered into ground lease and lease administration agreements which expire in July 2109. The

ground leases provide for upfront base rent payments totaling $5,940,000 which is equal to the base rent

payable under such leases for the first lease year. Base rents for years two through four of the ground leases

amount to $800,000 per year and on the first day of the fifth lease year the tenant shall pay the non-refundable

sum of $9,660,000. Commencing on the first day of the tenth lease year and the first day of every fifth lease

year thereafter throughout the term the annual base rent shall be increased by 7.5%. The ground leases also

contain provisions for the payment of PILOT, PILOST and PILOMRT to BBP.

In August 2013, BBPDC acquired fee title to a property which automatically became part of BBPDC’s Ground

Lease with BBP. The cost of acquiring the property of $9,200,000 was paid by BBP and was reflected as land

acquisition costs in nonoperating expenses in the accompanying financial statements for the year ended June

30, 2014. BBP then entered into a ground lease agreement, for a portion of the acquired property, with the

developer which expires in July 2109.

During the year ended June 30, 2014, BBP received an initial lease payment from the developer amounting to

$9,350,000 and such payment was used to fund the acquisition of the property. The ground lease provided for a

second lease payment of $17,150,000 which was paid to BBP in August 2014 and base rental payments

commencing on the fourth anniversary of the commencement date increasing 3% annually thereafter. The

ground lease also contains provisions for the payment of percentage rent, PILOT, PILOST and PILOMRT to

BBP. The initial and second lease payments were deemed fully earned and is non-refundable under any

circumstances.

In September 2013, BBP entered into an agreement for the development of Empire Stores. Pursuant to this

agreement, BBP has entered into a ground lease agreement with the developer which expires in July 2109.

During the year ended June 30, 2014, BBP received an initial lease payment from the developer amounting to

$26,000,000. Such initial lease payment was deemed fully earned and is non-refundable under any

circumstances. BBP reflected such payment as ground lease rent revenue during the year ended June 30, 2014

in the accompanying financial statements. The ground lease provides for base annual rents commencing after

the third anniversary of the commencement date with escalation clauses for increases in base rent over the

term of the lease. The ground lease also contains provisions for the payment of percentage rent, PILOT,

PILOST and PILOMRT to BBP.



JUNE 30, 2018 AND 2017

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NOTE 6 – FUTURE MINIMUM GROUND LEASE REVENUES (Continued)

In December 2013, BBP entered into an agreement for the development of a marina at Pier 5. Pursuant to this

agreement, BBP has entered into a ground lease agreement with the developer which expires in December

2043. The ground lease also contains provisions for the payment of percentage rent, PILOT, PILOST and

PILOMRT to BBP.

In July 2016, BBP entered into an agreement for the development of condominium buildings on two parcels of

Pier 6. Pursuant to this agreement, BBP has entered into a ground lease agreement with the developer which

expires in July 2109. During the year ended June 30, 2017, BBP received two initial lease payments from the

developer amounting to approximately $12,500,000. Such initial lease payments were deferred as of June 30,

2017 as they were refundable pending on a litigation against the construction as described in Note 9B. During

the year ended June 30, 2018, the lawsuit was dismissed and the two initial lease payments were deemed fully

earned and are non-refundable under any circumstances. In addition, the ground lease provided for second

lease payments of $91,500,000, of which $13,000,000 was paid to BBP in April 2018. $50,000,000 is scheduled

to be paid to BBP in December 2018 and the remaining $28,500,000 due by June 28, 2019. The second lease

payments were deemed fully earned and are non-refundable under any circumstances. BBP reflected such

payments received as ground lease revenue during the year ended June 30, 2018 in the accompanying

financial statements. The ground lease provides for base annual rents commencing after the third anniversary

of the commencement date with escalation clauses for increases in base rent over the term of the lease. The

ground lease also contains provisions for the payment of percentage rent, PILOT, PILOST, and PILOMRT to

BBP.

The future minimum base rent to be received under the ground leases during each of BBP’s five fiscal years

ending from June 30, 2019 through 2023, each five year period from fiscal years ending from June 30, 2024

through 2068 and through the end of the lease terms (thereafter), are approximately as follows:

2019 $ 4,579,000

2020 5,322,000

2021 5,475,000

2022 5,641,000

2023 5,062,000

2024-2028 30,744,000

2029-2033 34,463,000

2034-2038 38,666,000

2039-2043 43,391,000

2044-2048 45,754,000

2049-2053 51,463,000

2054-2058 57,948,000

2059-2063 65,348,000

2064-2068 73,777,000

Thereafter 1,066,443,000

$1,534,076,000



JUNE 30, 2018 AND 2017

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NOTE 7 – PENSION PLAN

BBP contributes to the Brooklyn Bridge Park Pension Plan (the “Plan”), a defined contribution plan which covers

substantially all of BBP’s employees. Employees will become eligible for the Plan upon the completion of two

years of service with BBP. The Plan is administered by BBP and BBP may choose to amend and/or terminate

the Plan at any time.

The Plan provides for variable contribution rates by BBP ranging from 6% to 14% of the employee’s eligible

wages as defined in the plan document. Employee contributions to the Plan are not permitted. Employees

become vested after the completion of two years of service with BBP and non-vested employer contributions

are forfeited upon termination of employment. Such forfeitures are used to cover a portion of the Plan’s

administrative expenses. There were no forfeitures for the years ended June 30, 2018 and 2017, respectively.

Pension expense included in personnel costs in the accompanying statements of revenues, expenses and

changes in net position for the years ended June 30, 2018 and 2017 amounted to $232,106 and $176,520

respectively.

NOTE 8 – CONCENTRATION OF CREDIT RISK

As of June 30, 2018, the bank balance of BBP’s deposits was $61,353,793, of which $750,000 was covered by

Federal Deposit Insurance Corporation (“FDIC”) insurance and the rest was uninsured. As of June 30, 2017, the

bank balance of BBP’s deposit was $54,771,619, of which $750,000 was covered by FDIC insurance and the

rest was uninsured. The uninsured balance was exposed to custodial risk on the basis that the uninsured bank

balance is not collateralized. Custodial credit risk is the risk that in the event of bank failure, BBP’s deposits may

not be returned to it or BBP will not be able to recover collateral securities that are in the name of an outside

party.

BBP has entered into a custodial agreement (the “Agreement”) with JP Morgan Chase Bank, N.A. (the “Bank”) in

which the Bank will deliver to a custodian for deposit the amount of any uninsured deposits of BBP multiplied by a

margin factor of 102%. The custodian will hold any eligible securities pledged by the Bank as collateral for the

benefit of BBP pursuant to the Agreement. All securities held by the custodian as collateral are registered and are

held in BBP’s name. As of June 30, 2018 and 2017, the collateral held by the Bank for the benefit of BBP

amounted to $61,545,323 and $55,570,741 respectively, which consisted of U.S. Treasury securities.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

A. Contingencies for Future Audits by Governmental and Other Funding Sources

Pursuant to BBP's contractual relationships with certain governmental and other funding sources, such funding

sources have the right to examine the books and records of BBP involving transactions relating to these

contracts. The accompanying financial statements make no provision for possible disallowances. Although

such possible disallowances could be substantial in amount, in the opinion of management, any actual

disallowances would be immaterial.

B. Litigation

In June 2015, a neighborhood group filed a lawsuit in Kings County Supreme Court (the “Court”) against

BBP seeking a declaratory judgment that development being constructed on Pier 1 exceeds height

limitations. The Court dismissed the complaint in September 2015. In March 2018, the Appellate Division,

Second Department affirmed the lower courts dismissal.



JUNE 30, 2018 AND 2017

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NOTE 9 – COMMITMENTS AND CONTINGENCIES (Continued)

In June 2016, a neighborhood group filed a lawsuit in the New York Supreme Court against BBP

challenging a planned development project on Pier 6. In February 2018, this lawsuit was dismissed. The

timeframe for petitioners to file a notice of appeal has since lapsed.

BBP is involved in several personal injury actions for which management expects BBP to be fully

indemnified. Accordingly, these matters are not expected to have a material adverse effect on BBP’s

financial condition.

C. Park Security Agreement with the New York City Department of Parks and Recreation

BBP has entered into an agreement with New York City Department of Parks and Recreation (“DPR”) for DPR

to provide security and enforcement of all applicable laws, rules and regulations in and around the public areas

of the Park. The original agreement was through February 28, 2011 and was subsequently renewed through

June 30, 2016. There is an option in the agreement to renew for up to four one year periods up to June 30,

2020. Total costs for security expenses amounted to $1,559,797 and $1,135,161 for the years ended June 30,

2018 and 2017, respectively. The agreement is in the process of being renewed up to June 30, 2019.

EXHIBIT B

Brooklyn Bridge Park Corporation d/b/a

Brooklyn Bridge Park (“BBP”)

EXHIBIT C

FISCAL YEAR 2018 INVESTMENT REPORT

[Attached]

1

Brooklyn Bridge Park Corporation

ANNUAL INVESTMENT REPORT

FOR THE YEAR ENDED JUNE 30, 2018

Investment Guidelines and Amendments

Attached hereto is the current investment policies, procedures and guidelines (the “Investment

Guidelines”) of Brooklyn Bridge Park Corporation (“BBP”). In the fiscal year ended June 30, 2017, the

Board did not approve any changes to the Investment Guidelines previously adopted.

Investment Guidelines

I. Purpose

The purpose of this document is to establish policies, procedures and guidelines regarding the

investing, monitoring and reporting of funds of the Brooklyn Bridge Park Corporation

(“BBP”).

II. Scope of the Investment Policy

This policy applies to the funds of BBP, which for purposes of these guidelines consist of all

moneys and other financial resources available for investment by BBP on its own behalf or

on behalf of any other entity or individual.

III. Investment Objectives

The portfolio shall be managed to accomplish the following objectives:

A. Preservation of Principal – The single most important objective of BBP’s Investment

program is the preservation of principal of funds within the portfolio.

B. Maintenance if Liquidity – The portfolio shall be managed in such a manner that assures

that funds are available as needed to meet immediate and/or future operating

requirements of BBP.

C. Maximize Return – The portfolio shall be managed in such a fashion as to maximize

income through the purchase of authorized investments as stated below, taking into

account the other investment objectives.

IV. Implementation of Guidelines

The President, or any designee, shall be responsible for the prudent investment of funds and

for the implementation of the investment program and the establishment of investment

procedures and a system of controls to regulate the activities of subordinate staff, consistent

with these guidelines.

2

V. Authorized Investments

A. The President, or any duly appointed designee, is authorized to invest funds of BBP as

summarized and restricted below:

1. U.S. Treasury Obligations. United States Treasury bills and notes, and any other

obligation or security issued by the United States Treasury or any other obligation

guaranteed as to principal and interest by the United States.

2. Federal Agency Obligation. Bonds, notes, debentures, or other obligations or

securities issued by any agency or instrumentality of the United States.

3. Commercial Paper. Commercial paper rated A1 or P1 by Standard & Poor’s

Corporation or Moody’s Investor’s Service, Inc. or Fitch.

4. Bankers’ Acceptances and Time Deposits of banks with worldwide assets in

excess of $50 million that are rated with the highest categories of the leading bank

rating services and regional banks also rated within the highest categories.

5. Certificates of Deposit with New York banks, including minority-owned banks.

All such certificates of deposit in these banks must be Federal Deposit Insurance

Corporation (“FDIC”) insured, except when otherwise collateralized.

6. Other investments approved by the comptroller of New York City for the

investment of City funds.

B. In addition to the above investments, BBP may deposit funds in the following (“Deposit

Accounts”), with respect to funds needed for operational expenses and funds awaiting

investment or disbursement:

1. High quality no-load money market mutual funds that restrict their investments to

short term, highly rated money market instruments.

2. Other interest bearing accounts, if permitted by applicable laws, rules, and

regulations, with New York City financial institutions designated by the New York

City Banking Commission.

3

VI. Written Contracts

BBP shall enter into written contracts pursuant to which investments are made which

conform with the requirements o

Brooklyn Bridge Park Meeting of the Directors Held at 334 Furman … · 2020. 10. 10. · Stephen Levin* Rebecca Miller Stephen Merkel Susannah Pasquantonio Tucker Reed William Vinicombe

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